retiring in vancouver

This is a guest post from Amanda who has an inspirational financial story to share.  Their single-income family of four currently lives in Vancouver and building wealth through the traditional methods of saving and investing.  Here is their journey towards financial freedom by the age of 50.

When FT asked if I’d like to share our story, I jumped at the opportunity. I hope that in sharing our journey to financial independence, I’ll have more opportunities to connect with and learn from other readers of the MDJ blog.

Who are we?

We’re a regular middle-class Canadian family living in a nearby suburb of Vancouver. We own our house and two cars. We enjoy one long vacation and a few weekend getaways each year. I’ve been at home with our sons since they were born, and we’re on track for financial independence before age 50 (in about 7 years.)

Related: How we save money on vacations.

How did we get here, with no lottery wins, inheritances, or high-paying corporate jobs to thank? Read on to learn about the key factors in our financial successes.

Factor 1: Strong foundations

My husband and I were fortunate to have been raised by frugal, hardworking parents. They immigrated to Canada in the 60s with next to nothing and spent a lifetime working and saving hard to give their children brighter futures. For most of their working careers, our parents were low to middle-income earners. They knew the value of money and how to make a dollar stretch. This is one of the critical factors in our financial success – we had a strong foundation in the example our parents set for us.

Through our childhood years, our parents squirreled away all our Child Tax Benefits, birthday and Christmas money. They wanted us to one day have a nest egg to put towards a big life goal, and that’s exactly what we did. Those nest eggs eventually became about a third of the down payment on our house.

Factor 2: Fear of debt

In his TEDx talk, Preet Banerjee says we need to bring back the fear of debt, particularly consumer debt. Our parents always held this belief and put a healthy fear of debt into us. In fact, they took this to another level and taught us to fear “good” debt (a mortgage) just as much as “bad” debt (credit cards). They showed us how much of our hard-earned money was going towards the interest on our mortgage, and how little (in the early years) goes towards the principal. This was a vivid lesson in how debt can whittle away at your savings.

Because of this, we’ve never had any form of debt outside of our mortgage – no credit card balances, car loans, or HELOC. We avoid debt like the plague, and as a result, most of our money has been working for us instead of some big bank.

Factor 3: House hacking

House hacking is a newish term that refers to homeowners who minimize or eliminate their housing costs by renting out portions of their home. While this term didn’t exist when we bought our home, the house hacking concept was definitely well-known. In those days, it was referred to as a basement/ secondary suite or mortgage helper.

Part of our parents’ financial successes was due to “house hacking” in their early years of home ownership. When it came time for us to buy a house, our parents strongly encouraged us to look for a house with a rentable basement suite.

We looked at over 50 properties before we finally found our dream home – and it had a large, bright basement suite. With this suite, we now had a portion of our house ready to work for us. We could either rent it to tenants or host international students – both were choices we were happy with.

Factor 4: A side hustle

We’d initially considered renting our suite to a tenant but decided instead to try hosting international homestay students. We’d heard wonderful things about hosting students from other homeowners and it sounded like a great fit for us.

Hosting students have been a life-changing experience and it has enriched our lives in so many ways (that go far beyond the monetary benefits). We’re very thankful to have had the opportunity to meet and learn from so many students from all over the world.

As a stay-at-home mom, hosting students has been a perfect side hustle. It feels good to contribute to our family income without having to leave my kids to do it. The hours are flexible and the work fits our daily lives (a little more cooking, cleaning, and laundry – no big deal!)

Very few families we know take advantage of this hybrid of house hacking/side hustle, but perhaps some of you will consider it now.

Factor 5: Frugal spending

I started typing a list of things we do to spend frugally, but FT’s already done it! Here’s his list: It’s remarkable how similar our lists are – so no point in repeating it all here.

Factor 6: High savings rate

Anyone in the FI community knows that your time to financial independence is linked more to your savings rate than to your income level (the higher percentage of income you save, the faster your path to FI.) This year, we’re on track to save about 55% of our income. We weren’t always able to save this much due to our lower incomes when we were starting out. But we’ve been quite good at resisting lifestyle inflation, so our savings rate has increased with each passing year as my husband’s salary has increased.

Factor 7: Be different

This factor is key when living in a high cost of living area. In such areas, you’ll likely be surrounded by people who have the means (or the credit limits) to spend easily. Fancy cars, trendy furnishings, and luxury vacations are the norm. While I’m not judging any of these choices, to reach FI at a younger age, you have to see these things as choices – not must-haves. You do not need to follow the crowd.

Having financial independence as a goal is kind of like a super-power. It gives you intense motivation and drive to resist the pull of lifestyle creep, and makes it easy to “be different.”

Putting it all together

Now you know how we got here – let’s look at some numbers to give it more context. Our annual spending is about $45,000 for all expenses except travel. I budget $8,000/year for travel (usually it’s less, sometimes it’s a little more). That’s a total of $53,000/year, so we’ll need $1.325 million in investable assets to reach financial independence (25 x $53,000).

However, I feel more comfortable with a $60,000 annual budget to allow for future large expenses (car replacement/home maintenance/out-of-pocket medical and dental costs.) To meet that goal, we’ll need $1.5 million of investable assets to reach financial independence (we are currently at $650k investable assets).

“Wait!”, some of you might say. “If you’re saving 55% of your income, and you’re spending $53,000/year, you DO have a high-paying corporate job!” True, that is the case NOW. But this wasn’t the case for most of our lives. A large portion of our savings came before my husband attained his new, higher salary. (In fact, that could be yet another factor in our financial success – do well at your career and work hard towards career advancement and pay raises.)

In closing

I hope our story shows that you don’t have to be special or receive a windfall to reach financial independence. I do realize that housing costs in areas like Vancouver will change the journey for those just entering the housing market – you’ll have to be more creative in your housing choices. However, the steps we took to increase our income and savings can still help to move you in the right direction. 


  1. Leo Ly @ on October 10, 2017 at 10:26 am

    It’s really an inspiring story to try to reach FIRE with one income and living in such a high cost of living city.
    When calculating your save withdrawal rate, is the $60,000 that you are generating from your investments before or after tax?

    For me, I also live in a high cost of living city in Toronto and has aspirations to reach FIRE before the age of 50. Instead of focusing on investable assets, I focus on my target net worth of $2M and leverage my net worth to generate passive income from stocks and rental properties to fund my retirement.

    I plan to generate enough passive income and not have to withdraw my principal down. Hence, I won’t have to worry about running out of money.

    • Amanda on October 10, 2017 at 3:14 pm

      Hi Leo,

      Thanks for your comment. The $60,000 doesn’t include taxes, but I’m accounting for some grey areas which will make up the difference to pay for taxes:

      – We’ll hit our number earlier than anticipated due to my husband’s continually increasing income from promotions (but we’ll still add to the nest egg and add to the buffer amount.)
      – We may work another 5-10 years after hitting our number, just for enjoyment. My husband might teach ski school and I might work for a non-profit I’m passionate about (or start a blog.)
      – With the extra side hustle income, we won’t need to draw very much from our portfolios in the early years. This allows our portfolio to continue to grow exponentially.
      – I’m constantly looking at ways to reduce our expenses and feel we still have some fat to cut.
      – When my husband no longer needs to work full time, we’ll save $2,000 – $2,500/year on his work-related expenses.
      – I’m looking into adding leverage* to increase our investment potential. This will also help us reach our number sooner.

      Maybe it’s funny math (I’m no accountant!) But it’s how I can wrap my head around the large amount we’ll need to retire, be pretty realistic, and still feel motivated. Hope the info helps.

      *In the short time since writing this article, I’ve slightly changed my stance on debt. I’ve become more educated about how carefully managed “good” debt can catapult us into a new level of wealth, and am now looking into leverage (like you, Leo) to invest in more stocks and/or real estate.

      I’m excited to be able to connect with other like you Leo. I’ve already visited your blog and look forward to more conversations!

  2. Ian on October 10, 2017 at 9:01 pm

    Since the couple lives in Vancouver, if they bought the house a long time ago, they literally have a lottery ticket sitting in the drawer waiting to be cashed. Why not sell the house, move to a cheaper city, and retire today? I understand that, for a multitude of reasons, people get attached to the city they live in. But in this case, exercising the option of staying in Vancouver may come at a particular high price (i.e., the value of the lottery ticket sitting in the drawer waiting to be cashed).

    • Amanda on October 11, 2017 at 1:41 am

      You’re totally right Ian – we do feel like we’ve won a lottery ticket. But alas, you’re also right that we’re attached to this city for a multitude of reasons – mainly our large, close-knit family. It would be very hard on us and them to leave.

      The good news, as mentioned in my previous comment, is I’m figuring out ways to free up the equity in our home and make it productive. I’m learning how to safely use leverage to invest into real estate or more stocks (using the Smith Manoeuvre.) This will allow us to stay in this expensive place and maybe even hit our retirement goal even earlier.

      Still lots to learn though, so for now we’ll just keep working and saving hard!

      • Dividend Earner on October 13, 2017 at 1:06 pm

        Moving out of Vancouver for lower cost is always an option but there is a weather in Vancouver and scenery that cannot be found elsewhere and that can be a challenge.

        We are contemplating this and part of the move will be to keep the house in Vancouver (suburb) and rent in the other city to see if we like it.

        Congrats to you on your approach. It’s definitely the way to look at how to achieve your goals rather than expect the government to do something.

        I often remind others of how large cities have become across the world to put Vancouver in perspective (smaller units and higher prices is the norm). The population doubled in the past 10 years while I have been here. Infrastructure can barely keep up …

      • Ian on October 18, 2017 at 10:05 am

        All fair points but it comes with a price tag (i.e., the value of the lottery ticket sitting in the drawer waiting to be cashed). How much is that lottery ticket worth? If the house was bought a long time ago, it may be worth $2 million or more in tax free capital gains. This is a huge price tag for the privilege of living in Vancouver. I am not arguing against staying in Vancouver or not. I am simply pointing out that the decision of staying may come at a huge cost. Anyone in the position of giving up that much in tax free capital gains must really love Vancouver.

      • Dunny on February 5, 2018 at 1:59 pm

        I have a similar story to Amanda’s and gained net worth in similar ways. Ian, once you have a house in Vancouver or other coastal or international city, you should never sell it. It costs you nothing, goes up in value, and provides income. Even my friends who retired to their sailboat in the Med. before age 50 kept their London house and rented it out.
        I do well in the stock market (> than 20%) but not nearly as well as in the property market (increase in equity of 10 fold in 10 years). The lifestyle and health benefits are definitely worth it, and if you can generate enough cash flow to live a great lifestyle, why sell the best investment you will ever have for a condo or suburban house where you have to drive everywhere. You are not giving up a tax-free capital gain, you are keeping it and growing it. If I had sold my house at any time in the last 10 years, I would be living in a small deteriorating condo worth less than half as much, paying more in strata fees than my house maintenance cost, have no possibility of rental income, and no options, watching my former house climb in market value year by year.
        I am retired and my basic living costs are very low. I have rental income from part of the house. I do spend on luxuries, mostly travel for 6 months of the year, but none of my luxuries are commitments — they can easily be cut temporarily. So, no luxury cars or club memberships (don’t need the car that often in Vancouver anyway). No need for kitchen updates or fancy appliances that just go out of style or need replacing (and do not increase property value). I do like nice clothes and spa treatments and good food, but again, this spending could be curtailed easily for a few months if necessary. I have no expensive hobbies or interests (don’t ski, golf, or have a cottage or boat), but dine out, buy books, or go to a play whenever I want to. Fitness is easy and free (walking, cycling, a few weights in the house). The house can be sold at any time in the future, but once you leave the Vancouver market or sell a house, you are never getting back into this market. It will also provide income for your entire life.
        At this time, with my house financial foundation under me, I can spend part of the money from my investment portfolio gains without worry (even if we have a correction), as I have fantastic safety net. I would never move any further from the ocean than I am right now and after owning 3 condos, I prefer the minor or non-existent hassles of a house over the major hassles of a strata corporation. I have another 30 years to go and want to make sure I have plenty of money to last me without cashing in now. Imagine making financial decisions of that magnitude 30 years ago.
        Another point about living in Vancouver, when comparing COL with my friends and family in suburbs and small towns across Canada, I find it cheaper to live here (commuting costs, heating, property taxes, food). Other people have to have a decent vehicles for each adult for all the driving they have to do while I made do with a small Japanese car for 28 years (sits in the garage most of the week). There is plenty of cheap healthy food available year round in our numerous small produce corner stores and nearby farms.
        The city is beautiful and quiet year round — no need for a cottage or ski cabin. The airport is 30 minutes away.
        That’s my take on the Vancouver housing situation.

  3. Tawcan on October 11, 2017 at 1:02 am

    Great story & info Amanda. Hello from a fellow Vancouverite. It is indeed possible to achieve FIRE while living in a high cost of living city.

    • Amanda on October 11, 2017 at 1:44 am

      Hi Tawcan! Thanks for commenting. I love your blog. You and your wife are doing such an amazing job at keeping your expenses low in costly Vancouver. You make us look like spendthrifts!

  4. Gwynne on October 11, 2017 at 12:45 pm

    Love this post. I also live in a burb of Vancouver and know how expensive it is to live an work here – especially with kids. I have also done most of what the author suggests but I struggle with #12 of Frugal Trader’s list. I’m time starved and often make myself feel better (for a moment) with some retail therapy (that I quickly regret). Trying to solve this by avoiding temptation overall and staying away from stores – sounds silly, but it has been effective for me.

    • Amanda on October 11, 2017 at 7:06 pm

      Hello to another near-Vancouverite! Gwynne, I’m the same as you and Winners was always my Achilles heel. I couldn’t walk out without at least one purchase. Like you, I find the best way to get around this problem is to avoid temptation and only go in when absolutely necessary, and with a shopping list!

  5. Future money-bags on October 11, 2017 at 5:04 pm

    It is always good to hear how others are coping and striving to achieve more, especially in my city of Vancouver. I am single and have been working towards FI since I was very young. I definitely don’t have a high paying job, but I have found a way to become financially independent by 50 through saving a large % of my wages and investing every dollar. If all goes well, I will reach that by age 40.

    I go several year without vacations and when I do go, It’s about $1,000. Frugal discipline and good spending/saving habits are very important.

    I am still renting where I live and am on track to save over 50% of my BEFORE tax income this year. I count tax as an expenditure, thus limiting what I spend on significantly.

    I haven’t posted here in a while but have been reading and posting since around 2008.

    • Amanda on October 11, 2017 at 7:08 pm

      I’m really happy to connect with so many of you who live in this area. Future money-bags, you’re clearly killing it with your savings rate and low cost of living. Kudos to you!

  6. Russ on October 11, 2017 at 5:36 pm

    Hi Amanda,

    Congratulations from Victoria, Keep up the great work!

    Unless I’m missing something your calculation of retirement withdrawals is too simplistic. Your investment totals are not a static number (unless they’re in cash). Even once you retire and begin making withdrawals your investments will continue to grow through capital appreciation and dividends. If you retire with $1.5M and it earns a modest 3% over inflation you’d be earning $45,000 and only require a capital withdrawal of the remaining $15,000.

    • Amanda on October 12, 2017 at 6:39 pm

      Hi Russ – thanks for the kind words. Nice to hear from one of our neighbours on beautiful Vancouver Island.

      You’re absolutely right that my numbers are simplistic. I actually have far more calculations worked into my plans, and many other iterations of where my portfolio could go, but didn’t include them here for simplicity. I’m also a creative (not math-oriented) person, so my calculations may be slightly off. I’d prefer to stay general so as not to get picked apart by those who are smarter than me!

      Once I get closer to needing to draw on the portfolio, I’ll sit down with a good advice-only planner to do some real math. For now, rough calculations work just fine for me. ;)

      You’re also right that my portfolio will continue to grow beyond what I’ll need to withdraw. I’m very aggressive with my asset allocation, but conservative with my projections. That’s the way I give myself a safety net.

  7. Enoch on October 11, 2017 at 7:12 pm

    Considering it’s high-cost Vancouver we are talking about, you guys have done very well for yourselves! kudos!
    In my little experience, lifestyle inflation is a major deterrent to reaching retirement goals. You get an income increase, and immediately you feel should drive a better car, spend more on kid’s clothing, update the house, eat out more often, and so on. Getting a partner on board with the dream of achieving FIRE can be a great help!

    • Amanda on October 12, 2017 at 6:44 pm

      Thanks Enoch – nice of you to comment. I totally agree with everything you’ve said. Lifestyle inflation is an insidious thing – it creeps in slowly, over time and is hard to notice unless you’re really aware of your spending choices.

      Regarding having your partner on board – I actually considered adding a Factor 8: choosing the right partner, but didn’t as my article was already well over 1,000 words!

  8. Future money-bags on October 11, 2017 at 7:21 pm

    Thanks Amanda, appreciate it.

    Having a partner on board is almost crucial in order to meet any sort of timeliness in achieving these goals. So far I haven’t had that ‘privaledge’ but I know it would speed up the process by a factor of at least 2.5-3x.

    But, this partner needs to compliment you or they will slowly you down significantly. Also another reason I so not have kids, I’m not financially ready.

    FI by 40 would be quite nice.

    • Amanda on October 12, 2017 at 6:49 pm

      Future money-bags: Being single could also be seen as an advantage – you can choose to be as frugal as you want to be without needing to consider others (not that I mind because I love my family!)

      But, for example, if I were single, I’d happily live downtown in a tiny rental apartment and walk/bike/take transit everywhere. I might even go vegetarian to save on food costs and be healthier. There are different levers you can pull as a singleton. As a couple or a family, there’s a larger ship to steer, and more opinions to consider, so big changes are a lot harder to pull off!

      • Future money-bags on October 12, 2017 at 6:56 pm

        Very true indeed. Only having to take care of yourself is a huge benefit (I also sent have pets) and allows me to make sacrifices and work more than the average.

        But for investing purposes, if I had help when I was younger or even now, I would have been able to jointly purchase twice as early and twice as many properties. I didn’t start investing until I was 25 and buy my first place until I was almost 30.

        Hindsight is 50/50 and I did the best for what I was given and had knowledge of. Google is my best professor.

      • Amanda on October 12, 2017 at 6:58 pm

        “Google is my best professor.” – I agree!

  9. El Pescado Grande on October 11, 2017 at 8:45 pm

    One of the previous commenters asked about whether the required income of $60k was before or after tax.

    If the $60K consists of eligible dividends, and is split evenly between the two of them, they would pay zero income tax. (This is based on 2016 rates, which can change obviously).

    If the income is half eligible dividends and half withdrawals from their RRSP, they’d pay $1,051 in income taxes as a couple. (The bank might withhold more from their RRSP withdrawals, but that would be their net payable).

    It’s interesting to play around with these scenarios but in Canada, thanks to the preferential treatment of eligible dividends (and the fact that you don’t need to pay CPP and EI), income tax is often a low amount for couples with modest incomes.

    • Amanda on October 12, 2017 at 6:56 pm

      Great points El Pescado Grande. Canadian dividends are great! Capital gains (if drawing from non-registered investments) are another preferentially-taxed source of income.

      I also find it really interesting to play around with the different scenarios.

      • Dunny on February 5, 2018 at 2:33 pm

        Amanda you have the right approach on everything. I do tell people that they will be very surprized at how net worth and income continue to grow even after retirement, even if you are downsized and retired before you expected it.
        Paying attention and constantly reviewing all the scenarios, keeping basic expenses low, not being afraid of mortgage debt, and learning about how to invest in the stock market are all good strategies.
        I do like luxuries and, beyond determining priorities, in my 40’s I was smug about my frugal abilities but decided to cut all spending on non-essentials to find out what really hurt the most. It was revealing. First I decided what I would never cut — decent hair cut/colour, decent spectacles every two years. Everything else was slashed to the bone. Every penny tracked. I reassessed at 6 months. What hurt the most and what was not noticed after a few weeks. Certainly cutting out popcorn at the movies and magazines did not hurt after the first few weeks. I did not notice subscriptions and memberships. Books hurt a lot, so a modest allowance for books was added back after 6 months. Once the bank account was flush enough to cover a years worth of major expenses in advance including RRSP contributions, insurance (only 18 months), I added back allowances for a few more categories. I upgraded my household equipment (linens, knives) but once that was done, no need for more. I added in the entertainment (courses, plays) clothing and travel categories.
        Over the years of working I think not putting money into cars made a huge difference. Not commuting.
        Cutting monthly automatic expenses works well too (subscriptions, membership, charity).
        Cooking at home and saving eating out for pleasure, never because I am too tired or busy to cook.
        Not smoking or drinking in bars (glass or two of wine is fine).
        Cutting out all gifts and all holiday type spending (amazing what a wonderful time you can have just spending time with loved ones and making delicious food).
        Never have consumer debt ever, even student loans. I worked my way through higher education at night.
        Spending on appreciating assets is good.
        Spending on neutral assets such as decent furniture, cutlery, dishes, pots that last forever is okay if you are the type to keep and use things forever (me). Spending on depreciating items, such as cars, motorcycles, ATVs, skiddos, boats, appliances, electronics, fancy vacuums, barbecues, sports equipment, power tools, lawn mowers, and gym equipment is to be avoided. Cheaper to hire people to do these jobs than own and store a lot of things that you don’t even use.
        I make lists of what I want or think I might want, and then might buy something from the list if it has been on the list for a long time. i avoid impulse buying.

      • Amanda on February 7, 2018 at 3:57 pm

        Dunny – thanks for your comment. I love your philosophy and learning about your spending habits. If only more people could choose to live more mindfully and oriented to their own values like you. I find that too many of my peers live based on FOMO and Facebook likes. It’s a sure path to a long, mandatory working life.

        Thanks for sharing your story. It’s nice to meet others who are traveling along a similar path.

  10. May on October 12, 2017 at 4:10 pm

    Hi, Amanda, thanks for the sharing and congrats on your financial achievement. It’s so impressive that your annual spending is about $45,000 for all expenses except travel. I live in suburb of Metro Vancouver too. Similar to you, I have two kids. Our annual expense is in the middle of 50K excluding travel. I feel it’s quite difficult to cut it further. We are both working and my excuse is that we have more working-related spending. E.g. I have to pay to get the kids picked up from school. Commuting also cost quite a bit with the gasoline having been expensive.

    I will soon move into a new house with two spare bedrooms in the basement. Maybe I should host some international students too. May you please share some information regarding to where you find students and what is the responsibility of the hosting family? Do you think it’s possible for a working couple with two young kids who are already very busy?

    Just like you, I am thinking to use heloc for a SM portfolio. But with the higher interest rate and the market at its top I probably will wait for a better time to do that.

    • Amanda on October 13, 2017 at 1:52 am

      Hi May,

      Mid-50K per year is still doing really well in the Vancouver area, especially with (I assume) daycare costs. You’re doing great!

      Regarding students, here are answers to your questions:

      – Where do you find students?
      We work with language schools located in downtown Vancouver. Google Vancouver language school homestays and you’ll find at least half a dozen schools. We also know families who take in elementary or high school students from their local school district.

      – What is the responsibility of the hosting family? 
      Basically, it’s like having university-aged children. You’ll need to house and feed them and most importantly, interact with them. We treat our students like part of the family. They go shopping with us, hang out to watch movies, play with our kids. That’s what makes it an enjoyable experience – making the connections with them as people. Don’t treat your hosting job or your students like a meal ticket or you’ll all be miserable!

      – Do you think it’s possible for a working couple with two young kids who are already very busy?
      Absolutely! We know plenty of families who are dual income with little kids and they make it work. My best tip for successful hosting when you’re busy is to get really good at meal planning. Plan at least a whole week in advance, buy the groceries all in one trip, prep as much as you can on the weekend, and plan for some easier meals on nights when you know you’ll be home late.

      Hope that helps!

  11. js on October 12, 2017 at 5:07 pm

    While this may be advice about how you could do that in a Vancouver suburb in the past, it doesn’t really apply these days. As a high-tech immigrant 20 years ago, I was able to buy a townhouse in the cheapest Vancouver suburb (which is really an Asian-Indian city), with a family income in today’s dollars of about $170k/year. And I saved enough to retire before 50. There would be no way I could do that today, with a townhouse like mine selling for $650k, and houses as described in this article going for well over $1.5M.

    • Future money-bags on October 12, 2017 at 6:50 pm

      Although it is difficult in today’s world of Vancouver, it’s not impossible. Instead of buying a principal residence first, I chose to buy rentals first to build up equity and passive income. This is basically the only way for a low income maker to ever afford property around this area.

      Currently refinancing some to further purchase more property.

      • Amanda on October 13, 2017 at 2:13 am

        JS, I echo what Future money-bags said – it’s more difficult now, but not impossible. As I mentioned at the end of my article, it will require creativity: renting, buying smaller, buying further away, hardcore house hacking (rent out the basement suite AND have roommates or students upstairs.) Or doing what Future money-bags is doing and becoming a real estate investor first.

        Right here in Vancouver there’s a couple living on around $26K/year and planning to retire in their 30s:

        So it’s definitely possible if you can “be different”!

  12. WS on October 13, 2017 at 2:06 am

    Math quiz – What is the yearly gross income of Amanda’s husband based on the above-mentioned info?

  13. kids-are-expensive on October 13, 2017 at 6:31 pm

    Why does nobody consider the expenses to raise kids?
    I put aside over 200K in RESP for the college alone (two kids)
    After school activities are easily 6-8K per year.

    This is the main reason why my wife and I still working at 44 (with 2M investable assets and 1M house with 250K mortgage)

    • May on October 13, 2017 at 8:43 pm

      Kids are surely expensive. After school activities cost more than $1000 for my two kids each month. I am also paying $600,000 difference for a bigger house with a better school. This should be considered as cost for having kids. I don’t put aside extra for college. I plan to downsize once kids go to college and the money freed from downsizing the house will be their educational fund.

      You are doing great with 2M investable assets. Even with a 3% rule, you can withdraw $60,000 without touching the principle. 44 is very young and nothing wrong with working at this young age. Maybe one of you can retire early already if working and taking care of the kids are too much. It’s definitely too much for me, but unfortunately I began investment too late and still need to work for financial security.

      • Amanda on October 14, 2017 at 3:17 am

        May – have you considered putting even a little bit into RESPs? The government matches your contributions up to $2,500/child. That’s FREE MONEY! It’s a 100% return on your investment. Where else can you get that?

        Further, if you live in BC and your kids were born after 2006, they can receive a one-time government grant of $1,200 to put into their RESP. It’s called the BCTESG. No contribution necessary – you just need to apply through an institution that offers it.

      • Amanda on October 14, 2017 at 3:32 am

        Oops – I’m sorry! Shouldn’t reply to comments late at night. Please ignore my 100% matching number for RESP grants – it is in fact 20%($500) in grants you get for $2,500 in contributions. It’s not 100% – my apologies for the error.

      • May on October 14, 2017 at 12:43 pm

        Yes I do. I max out all tax free accounts every year. But depending where the kids want to go, resp alone may not be enough. A good university in USA cost 70 to 80 thousands a year.

    • Amanda on October 14, 2017 at 3:11 am

      Kids-are-expensive – holy moly you’re knocking it out of the park! 2M investable assets, 1M house, and 200K in RESPs at 44?!! That’s just amazing. Congrats on your massive accomplishments! Really, you could teach us a thing or two about saving.

      Now, about kids being expensive, I have to politely disagree with you there. I’m going to wade right into this thorny topic, even though I’m sure I’m going to ruffle some feathers… ‘cuz I got some thoughts on that!

      You’re right – kids CAN be expensive, but they don’t HAVE to be expensive. We spend under $1000/yr on activities for both of our boys. Remember, you can “be different”. Kids don’t have to be in tons of activities, nor do they need to be expensive activities. My kids are active, healthy and have learned a wide variety of sports skills through community centre classes. They’re affordable, close to home, and fun.

      For academic skills, a little bit of research can help you find free/low-cost options (e.g. Splash Math app for math practice, Typing Instructor computer software to learn to type, or Scratch to learn coding, Duolingo app to learn a new language, free library programs to learn about Raspberry Pis, robotics, or creative writing.)

      For emotional/personal growth, good parenting books from the library are free, as are meditation apps for kids. Even more effective, and totally free – is to take the time you spent on too many activities and put it towards more quality time together doing free stuff like taking a walk, playing board games, learning to cook, etc. This pays itself in dividends, especially as your kids enter their teens. Having built this strong connection with them, you’ll save yourself money on counselling in the future!

      I’m by no means a perfect parent, nor are my kids perfect. But they’re happy, successful and resilient. They’re well-liked and have lots of friends, despite not participating in all the rep teams and expensive summer camps everyone else seems to be involved in. They are in no way left out, ostracized nor do they feel deprived. They in fact feel lucky to have such freedom in their schedules.

      Please don’t take my words as judgement. If you and your kids get a lot of value out of your activities, by all means, do it! Just be mindful of the invisible pressure we all feel to “keep up” – especially when it comes to our children. We’re a generation of FOMO parents, and we need to fight back against it because really – our kids will be just fine if they have fewer activities.

      Try taking a step back and consider what the end game is for any particular activity. Can you substitute it with a cheaper alternative that’s just as enjoyable and effective? Can you simply do without or cut back on the amount of activities? There are always options – spending a fortune on kids’ activities is NOT mandatory!

      As for saving for their education, 200K sounds like a very nice-sized amount for two kids to attend post-secondary – wow, well done! I’d think that would be enough? Even if not, there are scholarships and bursaries. There’s also the option to earn the first and second year of credits through a local, smaller university/college more cheaply, then transferring to a larger university. There are ways to save on post-secondary – but it will require you to “be different”. It may mean you don’t have the status of going straight into the top university right off the bat – but is that status worth you working another X number of years to pay for it?

      Again, my goal isn’t to make others feel judged for their decisions. We all need to make our own decisions on what’s most important to us. No one has the right to tell us if those decisions are right or wrong. Heck, we spend $8K/year on travel – many would call that ridiculous! It’s a matter of making smart trade-offs so you can feel good about your decisions and not deprived. I hope to show by our example that being different can be a path to more happiness, success and wealth.

      • May on October 14, 2017 at 12:57 pm

        Under $1000/yr deserves a big WOW. In my house, kids decide what activities they want. It’s hard for me to say NO when they require it. Piano lessons are one dollar per minute. I pay around 400 per month for piano alone. Each year I ask the kids if they want to continue and hoped them to say no. So far they still want it.

      • Alec on November 11, 2017 at 11:52 am

        Sure piano lessons might be a bit different unless you know how to play yourself. However I think a lot depends on whether you have a stay at home parent. With two parents working you also have more expenses. A lot of great cheap activities can be done with your kids if you have _time_. If you don’t have time you pay someone else’s time.

      • Amanda on November 12, 2017 at 12:46 am

        You’re right Alec – time is certainly at a premium for most families, but especially so when both parents work. I agree that sometimes you need/want to pay others (as we do with our yardwork and oil changes.) Sometimes it’s a matter of buying some time and sanity for yourselves – and I think that’s totally okay!

      • May on October 14, 2017 at 1:06 pm

        $8000 per year on Travel is not ridiculous at all. It’s money well spent. Good memories from the travel is very valuable. Also, the education for the kids should include both ten thousands books and ten thousands miles on the way. It’s good to take the kids to see the other parts and other people of the world.

        With kids, travel is also more expensive. You pay four tickets now instead of two.

      • Amanda on November 12, 2017 at 12:51 am

        “…ten thousand books and ten thousand miles…” Wise words!

  14. GYM on October 14, 2017 at 12:47 am

    Fellow Vancouverite here too :)

    Thanks for sharing your story, Amanda! Impressive annual spend for a family of 4! My husband grew up with his parents hosting home stays as well and he has met many people around the world from that program (and even visited some when he went to visit their country).

    I have a few questions:

    Are you including the income for your home stay (I am guessing $700-$1000 a month) in the 55% savings rate? Or is this in addition?

    What is your SWR (safe withdrawal rate) intending to be on a 1.3 million nest egg, and how many years is your projection of how long the portfolio will last (I am assuming 30 years?)?

  15. Amanda on October 14, 2017 at 3:33 am

    Hi GYM – thanks for the kind words. My answers:

    – Yes, the student income is included in our calculations of 55% savings rate. We earn an average of $10K/year from hosting (before subtracting expenses, which is portions of utilities, property tax, mortgage interest, etc.)

    – My math is based on a 4% withdrawal rate so my husband can quit working his current job. But we will work at fun, part-time jobs for maybe 5 years after that to allow our nest egg to grow until we can hit a 3.5% withdrawal rate.

    Does that all make sense?

    I try to be pretty accurate with my math, but I also build in lots of buffer in different ways (see my reply to Leo at the top.) So that makes my math a bit fuzzy. However, it gives me the best of both worlds – it’s as realistic as it can be, but it allows for flexibility and options in case things don’t go as planned.

    • GYM on October 14, 2017 at 3:04 pm

      Yes it makes sense, thanks! Working part-time I think seems like the best of both worlds (financial independence and freedom but also knowing you are contributing to your nest egg still).

  16. Vancouverite on October 18, 2017 at 10:26 pm
  17. Alec on November 11, 2017 at 11:47 am

    Thanks for sharing Amanda. That sounds a lot like what my parents were like but it was also a different time.

    What I am wondering about is whether all of it is worth it. It sounds like you guys do still take some vacations which is good. From your descriptions I’m not sure how you handle other things like going out to visit a museum, maybe a concert etc.

    I’m saying this because even though 50 is a relatively early age to retire you also still spend a lot of years until reaching that age in which things can happen. I don’t wish any harm but I’ve personally changed my attitude from “I’ll do that once I retire” to “I’ll do it whenever I can” since I watched my dad be diagnosed with cancer 2 years after going into early retirement (he retired at 58). He died 2 years later. Had he gone into retirement at 65 …

    I guess what I am trying to say is that it’s a balancing act to me. Save, sure. But don’t take away life’s joys and postpone for “early retirement” too much. One might not enjoy it for as long as thought.

    • Amanda on November 12, 2017 at 1:14 am

      I fully agree with every point you’ve made Alec. My mother, like your father, also died of cancer at a similar age and in a similar timeframe. She lived a happy life, and died with no regrets, but it was far too soon. Because of her example, I’ve always lived my life to its fullest. I could die today and be satisfied that I did everything I could in the time I had, with the financial resources that were available to me.

      You’ve made me realize that perhaps my article makes us sound very miserly and stingy! In fact, we live very full lives and often go to festivals, museums, movies and the odd concert (usually gifted by family or friends.) Many of these activities are free or low-cost, so we can easily afford to take part in them. We also regularly enjoy all that mother nature offers – for free!

      I’m always very conscious of our spending, but I’m careful to be frugal – not cheap. There’s a huge difference. Being cheap and stingy leads to unhappiness and feelings of deprivation. That’s not my goal, whether it be pre- or post-retirement. Frugality is choosing not to be wasteful with spending, and being mindful of where our resources are going.

      Your comment is a thoughtful, meaningful one and I think all of us should take your advice to heart. Thanks for sharing.

  18. Simon on December 14, 2017 at 9:22 pm

    Looks like these folks have a good plan and set it up when it was feasible.
    I am interested in how folks starting out – 20-30 yrs old – can do something similar especially in a horrible place to start out like the GVA or GTA.

    • Future money-bags on December 15, 2017 at 2:43 pm

      A large component for me being able to achieve this, is the balance and transferring of life expenses.

      This could mean having a roommate for a long duration, sharing bills, buying in bulk, planning meals, buying necessities over desirables.

      I have learned to want and desire the things I need and rely on. So it to want a new car, wait until you need it. If you want a new suit, wait until you need it.

      It takes a lot of planning, sacrifices, commitment and will power. Once you have achieved a. goal you set out for yourself, immediately make a new and larger goal without hesitation. This will prevent you from plateauing and becoming too comfortable in your daily routine.

      Living and building relationships with like minded people can help tremendously as well. If your friends are successful and hardworking and smart with their finances, it’s bound to wear off on those around them.

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